EU shows how to regulate tech giants nearer home

The European Commission on Tuesday unveiled drafts of the Digital Markets Act and the Digital Services Act, whose purpose is to rein in big information and internet corporations such as Google, Facebook, Apple and Amazon, which control data and platforms that people and businesses rely on.

The tech giants now face a new list of do's and don'ts, such as sharing certain categories of data with not only the regulators but also rivals, and they need to stop favoring their own services on their platforms or mining data from their platforms to gain advantage in the competition.

Notably, they are also required to inform regulators of planned takeovers in order to avoid "killer acquisitions", which refers to acquisition of nascent competitors by dominant players, or buying of smaller rivals to kill them off.
The companies are required to do more to check the illegal content they provide, and the misuse of their platforms. They are also required to disclose details of their online advertisers and the parameters used by their algorithms to suggest and rank information.

With independent auditors to be selected, the rules stipulate that the violators could be slapped fines of up to 10 percent of their annual global revenue, and repeat offenders can be broken up.

True, the regulators must not overstep their duties so as to thwart innovation. But some tech giants are indeed making tremendous profits because of loopholes in supervision. For instance, the Digital Services Act is expected to replace the e-Commerce Directive of the European Union that has not been revised in 20 years. The directive had two goals－to remove obstacles to cross-border online services in the EU, and to provide legal certainty to business and the people. As the first goal is no longer a matter of concern, the new rules should focus more on the latter.

China should draw a lesson from all this to better regulate tech giants at home.